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National Administrative Rules of Road Testing of Self-Driving Vehicles Promulgated----A Brief Commen

October 2018 - Finance. Legal Developments by JunHe LLP.

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National Administrative Rules of Road Testing of Self-Driving Vehicles Promulgated----A Brief Comment on Administrative Rules on the Administration of Road Testing of Intelligent Connected Vehicles

National Administrative Rules of Road Testing of Self-Driving Vehicles Promulgated----A Brief Comment on Administrative Rules on the Administration of Road Testing of Intelligent Connected Vehicles

Hongbin ZHANG, Yang ZHAO, He YANG

I.Background

Autonomous Vehicles, also referred to as “self-driving cars’’, “driverless cars”, "smart cars" and “intelligent connected vehicles” (“ICVs”) are rapidly developing in China and the government has given serious consideration to the development of the smart car industry. The ICV industry has been listed as one of the ten key areas for development as part of the Made in China 2025 strategy, and the Medium and Long Term Development Plan of the Automobile Industry identifies the development of ICVs as providing breakthrough opportunities in the transformation and upgrade of the automobile industry.[1]

Road tests play an essential role in the development and application of technology for ICVs. Since December 2017, various guidances, implementation rules and other documents relating to the road testing of ICVs ("Local Rules") have been successively issued in locations including Beijing, Shanghai, Chongqing. In addition, road testing facilities for ICVs have been built in Shanghai, Chongqing, Beijing, Zhejiang, Changchun (Jilin), Wuhan (Hubei), Wuxi (Jiangsu) and elsewhere. The legislative and practical insights acquired during the testing processes addressed in these Local Rules have provided a solid foundation for the issuance of nationwide unified administrative rules relating to ICVs.

On April 12, 2018, the Ministry of Industry and Information Technology, the Ministry of Public Security and the Ministry of Transportation jointly issued the Administrative Rules of Road Testing of Intelligent Connected Vehicles (for Trial Implementation) (the "Administrative Rules"), which subsequently came into force on May 1, 2018. The Administrative Rules are the first regulatory document on road testing of ICVs at the national level. By standardizing and unifying the Local Rules, they have served to accelerate the development of road testing processes for ICVs in China.

While there has undoubtedly been an enthusiastic response to the convenience – and the entertainment value – of ICVs, a recent pedestrian death caused by an Uber autonomous vehicle in Arizona, USA has highlighted that safety should always be uppermost in ICV development and road testing. The Administrative Rules take the approach that safety should be the overriding concern in the road testing of ICVs. We provide the following commentary on the issue of smart car safety as it is addressed in the Administrative Rules.

II. Safety Guarantee I: Admission and Management of the Testing Party

The Administrative Rules set out the requirements and conditions for test vehicles, test subjects and test drivers, and include a number of requirements for the management of tests so as to ensure safety during the road testing of ICVs.

1.    Test Vehicles: Six Requirements

The Administrative Rules set out six specific requirements for test vehicles, relating to their registration, mandatory items for testing, switching between self-driving and manual modes, data recording and real-time information monitoring, testing locations, and third-party verification of testing. Detailed requirements are as follows:

i. An ICV test vehicle cannot be registered as a motor vehicle;

ii. Mandatory items for testing should satisfy relevant requirements for corresponding vehicles, with the exception of durability. If a particular mandatory testing item is not met due to the self-driving function, it will need to be proved that this has not in any way jeopardized the safety performance of the vehicle;

iii. Is able to be steered both manually and automatically, and can be switched safely, rapidly and easily between the self-driving and manual driving modes;

iv. Includes the capability to record, store and monitor the status of the vehicle, providing real-time information about the current vehicle control mode and other specified information, and can automatically record and store data for at least 90 seconds prior to any vehicle accident or malfunction, with the data stored for at least three years;

v. Field tests for test vehicles shall be conducted only in locations approved for testing, such as closed roads or sites;

vi. The self-driving function of test vehicles shall be tested and verified by a third-party testing institute with the necessary inspection license as specified in the Administrative Rules.

In addition, in order to ensure safety during testing, the Administrative Rules stipulate that during a test, a test vehicle shall not carry any person or freight that is not of relevance to that test. The Administrative Rules further stipulate that the self-driving mode shall not be employed during an ongoing test, except when the test vehicle is running on roads designated for testing, and that the testing vehicle shall be driven manually from the parking lot to the road designated for testing purposes.

In terms of the requirements on test vehicles, the Administrative Rules appear to draw lessons from the road test rules issued by various local government authorities, and in particular those of the Shanghai local government authority.

2.    Test Subjects: Seven Conditions

The Administrative Rules set out seven conditions for test subjects, relating to the nature of the business entity, the scope of business, the capacity to compensate in the event of an accident, test evaluation, remote monitoring, event record analysis and conformity with laws and regulations. Detailed requirements are as follows. The test should:

i. Be an independent legal entity registered within the territory of the People's Republic of China;

ii. Have the relevant business capacity for intelligent ICVs, such as automobile and spare parts manufacturing, research and development of technology, and experimentation and testing;

iii. Have the financial capacity to cover civil compensation for any damages caused to people or property by ICVs during testing;[2]

iv. Have its own evaluation rules for the testing of the self-driving functions of ICVs;

v. Have the capability to conduct real-time, remote monitoring of test vehicles;

vi. Have the capability to record, analyze and reproduce events performed by test vehicles;

vii. Comply with other conditions required by laws, regulations and rules.

The Administrative Rules do not set out any special requirements for foreign invested enterprises, with the above provisions applied equally to wholly foreign invested enterprises and to Sino-foreign joint ventures registered in China.

Comparing the Administrative Rules with the rules of road testing previously issued by Beijing, Shanghai and other cities suggests that the Administrative Rules have for the most part taken as their basis the Shanghai rules relating to the conditions for the testing subject.

3.    Test Drivers: Eight Requirements

Based on the rules of road testing issued in Beijing and Shanghai, the Administrative Rules include eight requirements for test drivers on elements including employment or labor service contracts, self-driving training, and major traffic violation records. Specifically, test drivers should:

i. an employment contract or a labor service contract with the test subject;[3]

ii. Have held a driving license for driving the corresponding type of vehicle and have driving experience of at least three years;

iii. Not in the three most recent demerit periods have received twelve points under the demerit point system;

iv. In the past year, have no record of serious traffic violations, for example driving at a speed exceeding 50% of the upper limit or violating traffic light rules;

v. Have no record of drink-driving or taking State-controlled psychotropic or narcotic drugs;

vi. Have no record of traffic accidents causing death or serious personal injuries;

vii. Have familiarity with the testing rules and operation of self-driving vehicles following self-driving training sessions provided by the test subject, and be capable of responding to emergencies; and

viii. Comply with other requirements specified in laws, regulations and rules.

In addition, in order to ensure safety, and on the basis of insights gained from the accident caused by Uber’s self-driving vehicles, the Administrative Rules specify that a test driver must always be seated in the driver’s seat of the test vehicle, must observe the driving status of the test vehicle and the surrounding environment during the entire test process, and be ready at all times to take control of the vehicle.

III. Safety Guarantee II: Revocation of Testing Notice

The Administrative Rules set out various requirements on test vehicles, test subjects and test drivers in order to ensure the safety of testing. At the same time, the Administrative Rules refer to the road testing rules issued in Beijing and Shanghai, and especially the rules in Shanghai, and empower the competent authorities to revoke a testing notice under certain conditions. The Administrative Rules stipulate that should any of the following safety issues arise during the testing period, the competent authorities can revoke the testing notice and suspend the test:

1. The relevant competent authorities of the provincial or municipal government believe that the testing activities carry major safety risks;

2. The test vehicle is involved in a serious violation of traffic rules, such as violating traffic light rules, driving in the wrong direction, or other serious traffic violations for which the penalty under traffic law may be to temporarily detain or to revoke the driving license or to hold the violator in custody;

3. The party owning the test vehicle has the main responsibility in a serious traffic accident, which, for example results in serious personal injury, death or significant damage to a vehicle.

There is currently no specific provision in Administrative Rules as to what subsequent impact the revocation of a testing notice might have on the testing subject, such as whether the testing subject can re-apply for a test and if so how long it would need to wait to re-apply for such test. These details await further definition in future Local Rules.

IV. Safety Guarantee III: Assumption of Liability for Accident

In order to assign responsibility to the violating parties involved in traffic violations or accidents during an ongoing test, the Administrative Rules provide a specific section, entitled "Handling of Traffic Violations and Accidents", in which they clarify how to handle traffic violations, identify the liability of the parties involved, and specify the relevant departments responsible for handling accidents and imposing punishment. The Administrative Rules also stipulate the obligations of the concerned parties and the reporting requirements on the test subjects and provincial and municipal competent authorities following any accident. Details are as follows:

1. In the event of a traffic violation being committed during an ongoing test, the traffic administrative department of the public security authority shall deal with the test driver according to the existing laws and regulations regarding road traffic safety;

2. In the event of a traffic accident occurring during an ongoing test, the liability of the concerned party shall be determined according to existing road traffic safety laws and regulations, and the liability for damages shall be determined in accordance with relevant laws, regulations and judicial interpretations. Where a crime has been committed, criminal liability shall be pursued according to law.

In summary, in the event of any traffic violation, the liability should be assumed by the test driver, and in the case of traffic accidents, the party assuming the liability for the accident and damages should be determined according to the law. The Administrative Rules do not specify in any detail the liability of the test subject. Whether the test subject, as an employer, should assume overall liability for compensation, whether they should assume joint liability with the employee, or whether the producer and/or seller of the test vehicle should assume product liability may require determination from subsequent legislation or judicial practice.

V. Conclusion

The promulgation of the Administrative Rules goes a long way to meet the urgent demand for direction in the development of the ICV industry, providing unified rules for road testing of ICVs, and guaranteeing the legal basis for road testing of ICVs at a national level. Key questions for participants in the ICV industry are likely to include how to satisfy the safety requirements as set out in Administrative Rules, and how each subject might assume liability for any accident.

With the evolution of road testing practice in an ever-increasing number of cities, we will continue to pay heed to issues such as how the Local Rules may be amended according to the requirements of Administrative Rules, and how various local governments may interpret and specify the safety requirements and assumptions of liability as set out in the Administrative Rules.

HongBin Zhang    Partner          Tel: 86 10 8553 7625              Email:zhanghb@junhe.com

Yang Zhao      Associate      Tel: 86 10 8553 7807              Email: zhaoYang_Chris@junhe.com

He Yang          Associate      Tel: 86 10 8553 7731      Email: yanghe@junhe.com

[1]See the records of the joint press conference on Administrative Rules of Road Testing of Intelligent Connected Vehicles (for Trial Implementation) held by the Ministry of Industry and Information Technology, the Ministry of Public Security and the Ministry of Transportation on April 12, 2018: http://www.miit.gov.cn/n1146290/n1146397/c6128823/content.html.

[2] The Administrative Rules require the test subject to purchase compulsory accident liability insurance, as well as accident liability insurance of no less than RMB 5 million or self-driving road testing accident indemnity of not less than RMB 5 million for each test vehicle.

[3] This provision refers to the Beijing rules on road testing, and adds the requirement of “or entering into labor service contract” in addition to the Beijing rule of “entering into employment contracts.”

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